Insureon Blog

Settlements vs. Judgments: Workers’ Compensation Claims for Non-Profit Organizations

4. November 2013 15:17

This week, John Pike, a former UC-Davis police officer infamous for spraying peaceful protesters with pepper spray, was awarded a $38,000 Workman’s Comp claim for “psychiatric injuries.” Having been ridiculed and harassed by both mainstream and social media, Pike claimed in his Workers’ Comp filing that he suffered from depression and anxiety, and received death threats from having his personal information published online by the hacker group “Anonymous.” Interestingly enough, Pike will end up receiving greater compensation for the incident than the students injured by his actions (the per-student settlement came to about $30,000, plus legal fees).

Situations like this have non-profit organizations wondering: is it that easy for an employee to receive compensation for injuries on the job? This case certainly brings to light the strange predicaments one may encounter with Workers’ Compensation lawsuits. It also raises the question: What is the difference between a judgment and a settlement?

Workers’ Compensation Settlements for Non-Profit Organizations

First, a settlement is exactly what it sounds like: two parties involved in a court battle (for this situation we’ll use a Workers’ Compensation claim as an example) come to an agreement to resolve a dispute in court.

Let’s say your non-profit organization or social service has a barbecue for a fundraiser in which an employee manning the grill suffers serious burns from a punctured propane tank. It’s clear to both parties that the employee was injured on company time and that the injuries suffered should be covered by your Workers’ Compensation Insurance.

However, in order for all this to happen, it needs to be decided by a judge in a court of law. Once a deal is struck between the two parties, and the amount to be paid to the employee is “settled,” you can activate your Workers’ Compensation Insurance policy to cover the costs, paying the deductible established with your insurance provider.

This situation is best for both parties: it’s amicable, easy, and with the proper insurance in place everybody wins. The issues that may arise if this scenario ever plays out is what would happen if you took on a costly settlement without Workers’ Compensation Insurance in place.

3 Potential Judgments Your Non-Profit May Face

A judgment occurs when a settlement can’t be reached between the two parties and so requires a judge to render a decision. Judgments are bit more complicated than settlements because there are a variety of different types of judgments that may result from a case. For our purposes, here are three types of judgments your non-profit may encounter:

Additional Insurance Resources for Non-Profits and Social Service Providers

Not sure whether your nonprofit has adequate insurance to handle Workers’ Compensation claims? Check out the article “5 Things to Know Before Buying Insurance for Your Non-Profit Organization” to find out.

know your business risks


Insurance Terms Explained | Nonprofits

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